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What did you get for Christmas (or the gift-giving holiday of your choice)? At our house as at many houses, there were new gadgets under the tree, many of them made in China.

Most American families have enjoyed an abundant holiday season, even in this tail end of the so-called Great Recession. All of them have been able to purchase more things more cheaply because of the blessings of international commerce. Few Americans, however, paused during the gift-buying season to appreciate their good fortune to live in a country open to those blessings. Some, in fact, have cursed the abundance of imports and told their fellow citizens how wrongheaded and dangerous it is for Americans to buy cheap Chinese goods.

U.S. officials, backed by domestic manufacturers and their labor unions, have made careers out of complaining about the Chinese manipulation of the dollar-yuan exchange rate. The extremists among them seem to think that Americans would enjoy full employment were it not for unfair Chinese competition.

China did indeed aggressively devalue its currency in the 1990s, making all Chinese exports cheap. And for years thereafter, China did indeed peg its currency to the dollar. And even after China said it would allow the yuan to rise, it hasn't been allowed to rise very much. For almost 20 years, China has subsidized exports—and employment in export industries—by paying more yuan for every dollar than it would in a free market. And those subsidies have indeed made it more difficult for American companies in certain industries to compete in the world market and in domestic markets. Tens of thousands of Americans have lost their jobs because of the Chinese manipulation of exchange rates.

On the other hand, tens of thousands of Americans are employed handling, transporting and selling imports from China and other Asian countries with roughly the same policies. Many of these are jobs that would not exist without Chinese manipulation of the yuan. A million-plus
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workers, of course, are first in line among the pack of companies that achieve "everyday low prices" by going around the world to find low-cost producers. Freight haulers, retail workers and many others also benefit.

Other American industries, notably but not exclusively in high tech, also are prospering because they use low-cost Chinese materials, components and products in their own businesses, whether they purchase them from Chinese producers or make them in their Chinese factories. All their products are cheaper because of trade, and they don't think it's unfair at all. For them, free trade is a competitive advantage, even if subsidized by their Chinese partners' policies.

Chinese goods made cheap by currency manipulation have been a boon to most American consumers. Currency manipulation has also made money cheap for most Americans. Americans and their government have been buying on credit that's cheaper because China has been reinvesting its surplus dollars back at the source–the U.S.

What's more, China's success at selling us stuff leaves it with dollars to spend or invest. Of course, it uses its dollars to buy oil, but still there are many billions of dollars left over each month. China also purchases U.S. goods, from food to airplanes, and services, from insurance to industrial design, but still there are many billions of dollars left over, put, at the last resort, into the securities of U.S. businesses and the U.S. Treasury.

Sure, we can defeat Chinese manipulation, but why should we want to do any such self-effacing thing?

Slow Confiscation

The Internet thrives on property rights, not regulation.

Very little that the Federal Communications Commission does is really worth doing. For 76 years, it has tried to stifle speech, regulate prices and constrain supply of communications systems, both wireless and wired.

At least in broadcasting there is an excuse for such behavior: The airwaves, it is said, are public property and a scarce resource, so public officials must manage the airwaves in the public interest.

No such claim of public ownership or scarcity justifies federal regulation of communication over wires. Long-distance telephone service once was regulated because government had sanctioned a business called Ma Bell to create a monopoly, but the monopoly was broken decades ago. Regulation gradually withered away, leaving the owners of wires and poles to compete on service and price.

A wide assortment of telecommunications companies, some descended from telephone and cable TV companies, now operate portions of the universal, interconnected, mostly wired network we call the Internet. The important thing to remember is that they built it with investors' money to make a profit.

Last week, the FCC decided that the owners cannot operate their property to make as much money as they can for their investors, and to provide the services they think are demanded in the marketplace. Instead, the FCC says the owners of Internet property must protect the privilege of users to consume as much bandwidth as they please, transmitting any lawful content they please. They cannot limit access to their property by "bandwidth hogs" without asking for permission. Higher fees and traffic restrictions for heavy users must be "reasonable" in the eyes of the commission. We'd like to see FCC Chairman Julius Genachowski run a restaurant with all menu prices and quantities so regulated.

Laughably, the commission calls this a "pro-investment, pro-competition" policy. Others call it a policy to strengthen free speech, but they are using the wrong definition of free. The Internet isn't provided free of charge; it's property, built to return a profit by satisfying customers. That's why it works so well. It doesn't need a referee.

The FCC's idea of "net neutrality" regulation threatens to confiscate that property, inch by inch. That will choke off investment, limit speech and reduce consumer choices.